Stocks drop to start September as market frets over rate hike

US stocks fell on Thursday, the first day of September, as traders continued to worry about the potential for a Federal Reserve rate hike.

The Dow Jones Industrial Average fell 150 points, or 0.5%. The S&P 500 and the Nasdaq Composite fell 1.1% and 2.2% respectively.

All major averages are on track to end the week lower. The Dow is expected to post a decline of nearly 3%, while the S&P and Nasdaq are poised to end down around 3.5% and 4.5%, respectively.

The moves came as the 2-year US Treasury yield hit 3.516%, the highest level since November 2007, at some point on Thursday. This weighed on rate-sensitive growth stocks, making future earnings less attractive.

Nvidia shares also contributed to the losses, falling more than 8% after the chipmaker said the US government was restricting some sales to China.

Weekly jobless claims in the United States fell to 232,000 for the week ending August 27. That was weaker than expected by economists polled by Dow Jones. This is also down from the prior period and the lowest level since June 25.

The main averages come from four consecutive days of losses. On Wednesday, the last day of August, the Dow slipped nearly 0.9%. The S&P 500 lost about 0.8% and the Nasdaq Composite fell about 0.6%.

The Dow Jones closed the month down about 4.1%, while the S&P and Nasdaq posted losses of 4.2% and 4.6%, respectively.

Investors are wondering if equities will challenge June lows again in September, a historically poor month for markets, after weighing recent hawkish comments from Fed officials that show no signs of easing rate hikes. ‘interest.

“Many metrics are showing oversold signals, which, combined with significant support around 3,900, suggest the bulls ‘should’ be able to stage a rally here,” Chief Tech Jonathan Krinsky said on Thursday. of the BTIG market. “Given this setup, if they failed to hold 3,900, we would have to say the June lows were back.”